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Author: FoolMeOnce Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 757654  
Subject: Re: Retire on $500,000 or less? Date: 2/19/2000 7:07 AM
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galt67 writes:
Am I way off? I could see where your expenses could be 'per house', not for all five, which would dramatically reduce the monthly/annual income

Yikes! You are correct. I am doing this now with three houses instead of five and I slipped into my personal calculations. The expenses are understated by a ratio of three to five. Actual total expenses are closer to $6830 vice $4100/yr. Adjusted results are:

Cash flow $34,495 which represents 6.9% of equity.

Can you flesh this out some more?

Local tax rate is $.75/$100 assessed value which is usually less than market value.
Fire insurance is about $333/house/yr
Maintenance costs are taken from my own experiences. The $100K acquisition cost per house is for new houses which will initially have low maintenance costs. These can be expected to increase over time.

The point however, remains valid. Even with the figures as adjusted, the income is 70% greater than what can safely be generated from a portfolio of equities only, based on a safe withdrawal rate of 4%. This is a significant difference which may help someone make ends meet when attempting to retire on a small nut.

Regards,
FoolMeOnce

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